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Alanne, K., Salo, A., Saari, A. and Gustafsson, S.-I. 2006. Multi-criteria evaluation of residential energy supply systems. Energy and Buildings, accepted for publication. © 2006 by authors and © 2006 Elsevier Science Preprinted with permission.

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  • Alanne, K., Salo, A., Saari, A. and Gustafsson, S.-I. 2006. Multi-criteriaevaluation of residential energy supply systems. Energy and Buildings, acceptedfor publication.

    © 2006 by authors and © 2006 Elsevier Science

    Preprinted with permission.

  • Multi-Criteria Evaluation of Residential Energy Supply Systems

    Kari Alanne a,*, Ahti Salo b, Arto Saari c, Stig-Inge Gustafsson d

    a Dept. of Mechanical Engineering, Laboratory of Heating, Ventilating and Air-Conditioning,

    Helsinki University of Technology, P.O.Box 1100, 02015 TKK, Finland b Dept. of Engineering Physics and Mathematics,

    Systems Analysis Laboratory,

    Helsinki University of Technology, P.O.Box 1100, 02015 TKK, Finland c Dept. of Civil and Environmental Engineering,

    Laboratory of Construction Economics and Management,

    Helsinki University of Technology, P.O.Box 2100, 02015 TKK, Finland d Dept. of Mechanical Engineering,

    Division of Energy Systems,

    University of Linköping, 58183 Linköping, Sweden

    Abstract

    In this paper, we consider the selection of a residential energy supply system as a

    multi-criteria decision-making problem, which involves both financial and

    environmental issues. Specifically, we compare micro-CHP (micro-cogeneration)

    heating with traditional heating systems through an evaluation that accounts for (i)

    the decision-makers’ subjective preferences, (ii) uncertainties in the performance of

    micro-CHP heating systems (which are partly caused by the lack of long-term

    operational experiences), (iii) the context-dependency of life-cycle costs and

    environmental burdens of heating systems. Motivated by these considerations, we

    employ the PAIRS multi-criteria decision-making methodology that captures

    incomplete information by way of interval-valued parameters and provides support

    for sensitivity analyses, too. Our comparative analysis of alternative heating systems

    suggests that micro-CHP is a reasonable alternative to traditional systems,

    particularly from the environmental point of view.

    Keywords: multi-criteria evaluation, micro-cogeneration, micro-CHP, residential

    buildings

    * Corresponding author: Tel.:+358-50-4680892; e-mail: [email protected]

  • 2

    1 Introduction

    The introduction of sustainable energy systems is strongly associated to what choices

    real estate owners make among different heating options [1]. Earlier on, heating

    systems have been selected largely on the basis of capital costs and energy costs.

    Nowadays, such decisions are typically made on the basis of life-cycle costs;

    however, as environmental issues become increasingly important, it is necessary to

    consider the selection of technological alternatives a multi-criteria problem. Here,

    one of the challenges is that it may be difficult to obtain complete information about

    the decision-makers’ preferences. Furthermore, there are no long-term experiences

    from new technological systems, wherefore the performance of alternative systems

    with regard to the evaluation criteria involves uncertainties.

    Although real estate owners tend to prefer “soft” and “ecological” values, only few

    multi-criteria comparisons of residential heating systems have thus far been

    published: for example, Riihimäki et al. [2] and Huovila et al. [3] note that in Finland,

    good environmental value, good comfort, and safety are among the most important

    criteria. One possible reason for the apparent paucity of multi-criteria studies is that

    conventional multi-criteria approaches do not address uncertainties explicitly. A

    further reason may be that the costs have often remained the overriding criterion in

    the final decision.

    More broadly seen, however, multi-criteria optimization methods have found uses in

    the analysis of residential buildings. Li et al. [4] define a “green heating system” and

    employ a multi-criteria optimization process to determine the trade-off between cost

    and environmental performances for this system. Burer et al. [5] optimize the design

    and operation of a residential heating, cooling and power generation system with

  • 3

    regard to cost and CO2 emissions by a multi-criteria analysis. Even fuzzy sets have

    been employed in an attempt to deal with uncertainties in multi-criteria evaluations:

    Mamlook et al. [6], for example, use them in the comparison of solar systems.

    A timely example of a residential energy supply technology with limited operational

    experiences is small-scale combined heat and power generation (micro-CHP, micro-

    cogeneration) within a residential building. In this paper, we analyze the

    competitiveness of micro-CHP as one of ten alternative heating systems for a Finnish

    single-family house. These traditional systems are represented by district heating,

    geothermal heating, electrical heating applying baseboards, floor heating or auxiliary

    heat sources (fireplace, solar heating, air heat pump), oil heating (with or without

    solar heat collectors), and traditional natural gas heating. A micro-CHP heating

    system is defined as a traditional natural gas heating system equipped with a 1 kWe

    Solid-Oxide Fuel Cell and floor heating.

    In our analysis, we pay attention to the uncertainties that pertain to financial and

    environmental performance; we also account for incomplete information about the

    decision-maker’s preferences by using the PAIRS method (Preference Assessment by

    Imprecise Ratio Statements) [7] which is a multi-criteria decision making (MCDM)

    methodology based on multi-attribute value theory (MAVT) (see, e.g.,

    Keeney&Raiffa [8]). In the MAVT framework, the problem is structured as a value

    tree where the topmost attribute stands for overall decision objectives and where the

    attributes on the lower levels are used to measure to what extent these objectives are

    attained. The relative importance of attributes is expressed through non-negative

    weights that are normalized so that they add up to one.

  • 4

    In the present context, one of the advantages of PAIRS is that it admits incomplete

    information through intervals and enables several modes of sensitivity analysis. As a

    result, PAIRS is suitable for examining how the competitiveness of a micro-CHP

    heating system depends on alternative assumptions about the decision makers’

    preferences, for example. While PAIRS and related methods (e.g., PRIME,

    Preference Ratios in Multiattribute Evaluation) [9], have been extensively applied in

    other contexts (e.g. Gustafsson et al. [10] estimate the market capitalization value of a

    new technology-based company), the evaluation of residential energy supply systems

    is a new field of application.

    In the remainder of this paper, we first review results from the performance

    evaluation of residential heating systems and characterize relevant parameters

    through respective intervals. We then outline the PAIRS methodology, motivate its

    use in this evaluation problem, and present results from the comparison of ten heating

    systems for a Finnish single-family house.

    2 The sources of uncertainty

    2.1 Energy use

    In the evaluation of residential energy supply systems, the error of energy demand is

    mainly related to simulation errors and user-specific reasons, such as the use of

    electrical appliances [11]. There are also other sources of error, such as the difference

    between statistical and measured electricity demand. Experiences suggest that the

    variation between actual energy demand and energy demand estimated on the basis of

    statistics or simulations is at most ± 10 % [12,13].

  • 5

    2.2 Techno-economic parameters

    Data on techno-economic parameters is often acquired from i) the literature, ii)

    statistical data, and iii) expert judgments. The temporal (long-term) economic

    uncertainty in life cycle cost evaluations is mainly associated with the selection of

    discount rate, the prices of technology, electricity and fuels, the life span of

    technology and the characteristics of technology, such as efficiency. In liberalized

    energy markets, real estate owners may choose their energy supplier, which results in

    variability in end-user energy prices. At the moment, there is no consensus about the

    buyback price of electricity (i.e., the monetary compensation which an electricity

    producer receives per kWh of electricity he feeds into the grid). Actually, it may vary

    between zero and the full retail price of electricity.

    2.3 Use of materials

    The amount of materials can be determined if the exact composition of each product

    is known in the entire system. Because this information is rarely available, an

    estimate is needed. When evaluating environmental burdens due to the use of natural

    resources, one must consider resources contained by the end product as well as

    resources that are consumed by the production process; the latter constitute the

    “ecological rucksack” of the product. The total material input can be assessed

    employing the material input factor (MI) that indicates the amount of abiotic and

    biotic materials, water and air that is invested in producing a kilogram of a certain

    material or a kilowatt-hour of energy. Material input factors depend on several issues

    related to the production chains and technology and can vary significantly. A good

    example is copper whose abiotic material input factor varies from 179 kg kg-1 (the

    world average in 2003) to 500 kg kg-1 (produced in Germany in 1998); hence, the

    uncertainties in material input factors should be recognized [14].

  • 6

    2.4 Emissions

    Carbon dioxide equivalent (CO2 equivalent) and sulphur dioxide equivalent (SO2

    equivalent) indicate global warming and acidification, expressing the amount of

    carbon or sulphur dioxide that causes the same global warming or acidification as

    some amount of another gas. For example, according to the International Panel on

    Climate Change (IPCC), one kilogram of methane had a global warming potential

    equal to 23 kg of carbon dioxide in 2001. The equivalents – which depend on

    technology and production chains – can be determined for any material and form of

    energy, provided that the above relations (e.g. 23 kgCO2/kgmethane) for various gases

    are known. For example, when light heating oil is burnt in a boiler the efficiency of

    which is 93 %, the amount of released CO2 and methane is 0.284 kg and 0.004 g per

    one kilowatt of fuel, respectively [15]. The CO2 equivalent is 0.284 + 0.001·23·0.004

    ≈ 0.284 kg CO2 per one kilowatt of fuel.

    2.5 Conclusions of the uncertainty

    Table 1 presents estimates for the ranges of above parameters, based on the above

    statements and the earlier review by Alanne et al. [11]. In effect, life-cycle costs are

    minimized when the energy demand and price are at their lower bound, when the

    discount rate is at its upper bound, the unit price of a micro-CHP plant as well as

    service and maintenance costs are at their lower bound, and when the buyback price

    of electricity, investment support and overall efficiency are at their upper bounds.

    Environmental burdens, in turn, are minimized when the life span of a system is as

    long as possible, and the use of material and emissions attain their lower bounds.

    (Insert Table 1 around here.)

  • 7

    3 Methodology

    3.1 General frame

    If a decision is based solely on the minimization of costs, the decision maker’s

    problem is simple (i.e., select the alternative with the lowest cost). However, the

    problem becomes more challenging when environmental burdens should be

    minimized at the same time when costs, too, are to be minimized. This is because the

    minimization of costs and environmental burdens are usually contradictory

    objectives, as it is often expensive to utilize environmentally friendly products.

    In consequence, the selection of the heating system of a building is inherently a

    multi-criteria problem where both financial and environmental issues must be

    accounted for. This problem can be approached with value tree analysis that has a

    solid foundation in multi-attribute value theory (MAVT) [8]. In MAVT, the decision

    problem is structured as a tree (see: Figure 1) where the relevant objectives are

    modelled by corresponding attributes. Attributes on the higher level correspond to

    general objectives (e.g., minimization of life-cycle costs). These attributes are

    decomposed into more specific attributes on the lower levels such that numerical (or

    otherwise unambiguous) measurement scales can be attached to the twig-level

    attributes at the lowest level of the value tree.

    (Insert Figure 1 around here.)

  • 8

    3.2 The overall value of a heating system

    Applications of MAVT [22] are often based on additive models where low

    performance with regard to some attribute can be compensated by high performance

    with regard to another (e.g., high life-cycle costs can be compensated by low

    environmental burdens). In the additive model, the overall value (see: main goal in

    Fig.1) of a heating system is the weighted sum of its attribute-specific scores with

    regard to the relevant attributes, i.e.,

    1

    N

    i ii

    S w=

    = ∑ s (1)

    where S is the overall value of a heating system, N is the number of twig-level

    attributes, wi is the normalized weight (between 0 and 1) of the i-th attribute, and si is

    the normalized single-attribute score associated with the achievement level of a

    heating system on the i-th attribute.

    The relative importance of the i-th attribute is expressed in terms of its normalized

    weight wi in the unit interval [0,1]. At the two extremes, the case wi=0 corresponds to

    the case where the i-th attribute is irrelevant, while wi=1 means that the evaluation is

    based on the i-th attribute only.

    Scores are typically normalized onto the [0,1] range. If the performance of the

    heating system with regard to the i-attribute is to be maximized and approximated by

    a linear value function, the normalized score si can be calculated from

    ,min

    ,max ,min

    i ii

    i i

    a as

    a a−

    =− (2)

    where ai is the achievement level of a heating system with respect to the i-th attribute,

    ai,min is the lowest achievement level of all the alternative heating systems with

  • 9

    respect to the i-th attribute, and ai,max is the highest achievement level of all the

    alternative heating systems with respect to the i-th attribute. Conversely, when the i-

    th attribute is to be minimized in the same way, the normalized score si is obtained

    from

    ,max

    ,max ,min

    ii

    i i

    a as

    a a−

    =−

    i (3)

    The following example illustrates the determination of overall value for a micro-CHP

    heating system using the value tree in Fig. 1. For the time being, we assume that the

    attributes are equally important in the sense that they have equal weights; explicit

    preference statements will be introduced later, i.e., the following computations are

    merely illustrative.

    The weights of the higher level attributes (0.33 + 0.33 + 0.33 = 1) add up to one, as

    well as the weights of the twig-level attributes (0.167 + 0.167 + 0.167 + 0.167 + 0.33

    = 1).

    The alternatives consist of ten different heating systems, referred to as System 1

    through 10, with micro-CHP heating as the last one. The corresponding achievement

    levels are shown in Table 2.

    (Insert Table 2 around here.)

    In terms of life-cycle costs, System 4 is the best alternative because its life-cycle

    costs are lowest (35,550 EUR), while System 8 has the highest costs (65,900 EUR).

    If the decision-maker’s (DM) preferences for life-cycle costs are linear, the score for

  • 10

    life-cycle costs for a micro-CHP heating system (System 10) can thus be obtained

    from Eq. (3) as

    65900 65250 0.02.65900 35550LCC

    s −= =−

    Normalized scores and criteria weights for a micro-CHP heating system are presented

    in Table 3.

    (Insert Table 3 around here.)

    Based on the above weight and score information, the overall value of a micro-CHP

    heating can thus be obtained from Eq. (1) as

    0.33 0.02 0.167 1.00 0.167 1.00 0.167 0.52 0.167 0.71 0.55.CHPS = ⋅ + ⋅ + ⋅ + ⋅ + ⋅ =

    3.3 Application of PAIRS

    PAIRS method (Preference Assessment by Imprecise Ratio Statements) [7]) is a

    multi-criteria decision making (MCDM) methodology where problem structuring is

    carried out in accordance with the usual principles of value tree analysis (see, e.g.,

    [8]). In PAIRS, uncertainties about scores and weights are captured through interval-

    valued parameters. Based on these parameters, the corresponding lower and upper

    bounds for the alternatives´ overall values (value intervals) in Eq. (1) can be

    computed with linear programming.

    More specifically, we consider m alternative heating systems (j=1,…,m) and n

    attributes (i=1,…,n). The lower bounds for normalized scores are denoted by smin,11…

    smin,ji… smin,mn and the upper bounds smax,11… smax,ji… smax,mn. In PAIRS, information

    about the attribute weights is elicited through pairwise comparisons where the DM

  • 11

    specifies lower and upper bounds for the relative importance between two attributes

    at a time. More specifically, such a comparison yields the linear constraints

    iij ij

    j

    wlw

    ≤ ≤ u

    ji

    (4)

    where lij and uij are the lower and upper bounds that for the ratio between the weights

    of the i-th and j-th attributes, respectively.

    The overall value interval can be calculated from linear programs (LP)

    min, max,1 1

    min ,maxn n

    j i ji ii i

    S w s w s= =

    ∑ ∑ (5)

    where the minimization and maximization problems are solved subject to constraints

    that are imposed on the attribute weights (i.e., non-negativity constraints wi ≥ 0 ,

    normalization constraints , and preference statements in (4)).

    i∀

    11

    n

    ii

    w=

    =∑

    The relative superiority of one alternative to another can be determined through

    dominance structures and decision rules. In PAIRS, alternative A is better than

    alternative B in the sense of absolute dominance, if the least possible value (cf.

    benefit) of A is greater than the largest possible value of B; in this case the value

    intervals of the two alternatives do not overlap. If the value intervals overlap, it may

    be possible to conclude that one alternative is better than another on the basis of

    pairwise dominance: specifically, A dominates B in the sense of pairwise dominance

    if and only if the overall value of A exceeds that of B for all combinations of feasible

    score and weight parameters.

    When dominance relationships do not hold, decision recommendations can be

    provided by using decision rules (see [8]). The rules are (i) maximax (choose the

  • 12

    alternative with the highest possible overall value), (ii) maximin (choose the

    alternative for which the lowest possible value is highest), (iii) minimax regret

    (choose the alternative for which the greatest loss of value relative to some alternative

    is smallest), and (iv) central values (choose the alternative for which the midpoint of

    the value interval lies highest).

    4 Comparative analysis of heating systems

    4.1 Alternatives

    In the following comparative analysis, we examine the overall performance of

    following heating systems:

    1. District heating with floor heating (S1)

    2. Geothermal heating (with heat pump and bore hole) with floor heating (S2)

    3. Electrical floor heating (S3)

    4. Electric baseboards (S4)

    5. Electric baseboards + fireplace (heating 1-2 times per week) (S5)

    6. Electric baseboards + fireplace (heating 1-2 times per week) + solar heating +

    air heat pump (S6)

    7. Oil heating with floor heating (S7)

    8. Solar oil heating with floor heating (S8)

    9. Natural gas heating with floor heating (S9)

    10. Natural gas heating with 1 kWe Solid Oxide Fuel Cell and floor heating (S10)

    System S10 represents micro-CHP where a Solid Oxide Fuel Cell plant (Fuel Cell

    Technologies Ltd) is added to the gas heating system. The Solid Oxide Fuel Cell

    system is run at its full power throughout a year so that all heat is led to the heat

    distribution and domestic hot water system via the heat storage tank. The excess heat

  • 13

    and electricity are managed using the heat storage, a heat dump valve, the gas boiler,

    and an electricity service with bi-directional metering.

    4.2 Life-cycle costs

    The annual energy consumption and life cycle costs for Systems S1-S8 were obtained

    from the Finnish Energy Agency that estimates energy demand on the basis of the

    Finnish Standard D5. The energy demand of a Solid Oxide Fuel Cell heating system

    was determined as in Alanne et al. [23]. The parameters in Table 1 were modeled as

    intervals.

    4.3 Environmental burdens

    To determine the environmental burdens of Systems S1-S10, the composition of the

    equipment was evaluated by consulting the suppliers of energy systems, system

    designers and contractors, and the literature. The annual material input, the annual

    global warming (CO2-equivalent) and the acidification (SO2-equivalent) potential per

    one gross square meter of a house, including both the construction and operation of

    an energy supply system were estimated employing the factor data provided by

    Wuppertal Institute, the Intergovernmental Panel on Climate Change (IPCC), the

    Building Information Foundation (RTS) and the Technical Research Centre of

    Finland.

    Material Input Per Service Unit (MIPS) method has not been previously applied to

    the evaluation of the environmental burdens of a residential micro-CHP heating

    system. Because the air consumption provided by the Material Input Per Service Unit

    (MIPS) method overlaps with the effects of emissions on global warming, the air

    input that is normally included into Material Input Per Service Unit (MIPS) method

    was omitted. Moreover, “the use of biotic materials” was not significant, either.

  • 14

    All the parameters in Table 1 were modeled as intervals. The intervals for life-cycle

    costs (30 yr) and environmental burdens for each system containing the accumulated

    uncertainty are summarized in Table 4.

    (Insert Table 4 around here.)

    4.4 PAIRS model

    The PAIRS decision model was built with the WinPRE©1 decision support tool. The

    attributes were defined so as to capture the most significant factors on which the

    “value” of a residential energy supply system depends.

    The scores were set by normalizing the scores into the unit interval [0,1]. Based on

    the data in Table 4, the score information summarized in Table 5 was obtained from

    Eqs. (2) and (3).

    (Insert Table 5 around here.)

    4.5 Results

    To illustrate the impact of uncertainties in both score and weight information, we

    show results from an illustrative example where the preference statements put

    considerable weight on the environmental point of view, based on the authors’

    perceptions. The score intervals in Table 5 are applied.

    1 The WinPRE© software is available free of charge for research and teaching purposes at http://www.decisionarium.hut.fi.

  • 15

    The attribute weights are characterized through intervals, where the decision maker

    (DM) specifies through ratio comparisons how many times more (or less) important

    one attribute is with regard to another. Fig. 2 illustrates the weight elicitation in the

    present analysis as a WinPRE© screenshot. For example, the expression

    “w(LifeCycl)< 0,3 w(Abiotic)” in the first row in Fig. 2 indicates that life-cycle costs

    have been evaluated less than 0.3 times as important as the use of abiotic resources.

    (Insert Figure 2 around here.)

    The alternatives’ value intervals and dominance structures are in Fig.3 and Fig.4,

    respectively.

    (Insert Figure 3 around here.)

    (Insert Figure 4 around here.)

    The pairwise comparison in Figure 4 suggests that micro-CHP (S10) is a preferred

    alternative at least to district heating (S1), electrical heating (S3-S5), oil heating (S7)

    and natural gas heating without electricity generation (S9). The status of micro-CHP

    (S10) as a recommended alternative is also highlighted by both the maximin and

    maximax decision criteria. This can be explained by noting that the life-cycle costs of

    micro-CHP are relatively high and involve considerable uncertainties. Thus, if cost

    considerations are deemed less important, the impacts of changes in cost-related

    achievement levels become less significant; this is a major reason for why the micro-

    CHP performs so well.

  • 16

    5 Summary and conclusions

    In this paper, we have formulated the selection of a residential energy supply system

    as a multi-criteria decision-making problem where both life-cycle costs and

    environmental impacts are addressed (e.g., global warming, acidification,

    consumption of natural resources). Specifically, we have examined the

    competitiveness of a micro-CHP heating system with traditional heating alternatives

    for a single-family house in Finland, with a particular emphasis on the impact of

    several sources of uncertainties. The analyses have been carried out with the PAIRS

    methodology by introducing preference statements that place considerable weight on

    the minimization of environmental burdens.

    The numerical results suggest that micro-CHP heating can be a viable alternative,

    although no definitive conclusions about the overall value of different energy supply

    options can be made due to the presence of uncertainties. In practice, the overall

    value of alternatives depends on decision-makers’ preferences and techno-economic

    data, which in turn, are strongly affected by the location. Thus, caution is called for

    when interpreting the results of this work for the purpose of giving advice in settings

    where cogeneration is considered as an energy supply alternative for single-family

    houses. This notwithstanding, the results suggest that PAIRS can be a useful tool in

    the evaluation of residential heating systems.

    This research opens up several possibilities for future work. For example, one can

    combine similar multi-criteria decision analyses with forecasting models so that score

    information is obtained from confidence intervals around the forecasts. Such analyses

    would make it possible to assess when specific technologies are likely to outperform

    others, which would give support for the development of optimal investment

  • 17

    strategies. Furthermore, it would be of interest to construct portfolio optimization

    problems where the techno-economic parameters of micro-CHP are utilized to

    determine the optimal project configuration of residential energy system in new

    construction and renovation projects. In future work, it would also be of interest to

    expand the set of attributes (for example, safety and reliability issues were not

    covered here).

    Acknowledgements

    The funding of Fortum Foundation for this research is gratefully acknowledged.

  • 18

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    [19] H.I. Onovwiona, V.I. Ugursal, Residential Cogeneration Systems: Review of the

    Current Technology, Renewable and Sustainable Energy Reviews 10 (5) (2004) 1-43.

    [20] L. Vihermaa, M. Lettenmeier, A. Saari, Luonnonvarojen kulutus Suomen

    rautatieliikenteessä (The consumption of natural resources in Finnish railroad traffic),

    Liikenne- ja viestintäministeriön julkaisuja 56/2005 [in Finnish].

    [21] P. Sinivuori, A. Saari, MIPS Analysis of Natural Resource Consumption in Two

    University Buildings, Building and Environment 41(5) (2006) 657-668.

    [22] D.L. Keefer, G.W. Kirkwood, J.L. Corner, Perspective on Decision Analysis

    Applications, 1990–2001, Decision Analysis 1(1) (2004) 4-22.

    [23] K. Alanne, A. Saari, V.I. Ugursal, J. Good, The financial viability of an SOFC

    cogeneration system in single-family dwellings, Journal of Power Sources 158(1)

    (2006) 403-416.

    http://80.81.172.117/files/files/lcamanuaali2003.dochttp://www.energy.rochester.edu/efficiency/Life_cycle_cost_analysis.pdf

  • 20

    The use of abiotic resources kg/gross-m2,a

    The use of water kg/gross-m2,a

    SO2-equivalent kg/gross-m2,a

    CO2-equivalent kg/gross-m2,a

    MIN The use of abiotic resources (0.167)

    MIN The use of water (0.167)

    MIN Acidification Potential (0.167)

    MIN Global Warming Potential (0.167)

    MAX The value of a heating system (1.00)

    MIN Environmental Burden due to Natural Resource Consumption (0.33)

    MIN Environmental Burden due to Emissions (0.33)

    MIN Life-Cycle Costs (0.33)

    Life-cycle costsEUR

    Figure 1. A value tree with higher-level and twig-level attributes.

  • 21

    Figure 2. Weight elicitation in the numerical example.

  • 22

    Figure 3. Value intervals for incomplete score and preference information.

  • 23

    Figure 4. Pairwise dominance for incomplete preference information.

  • 24

    Table 1. Confidence intervals for various parameters.

    Parameter MIN MAX Energy Use Electricity demand, error-% A -10 +10 Primary energy demand, error-% A -10 +10 Economic parameters Real interest rate, % B 2 6 Price of district heat, error-% C -5 +5 Price of natural gas, error-% C -5 +5 Price of electricity, error-% D -10 +10 Price of oil, error-% E -10 +10 The buyback price of electricity, %F 0 100 Investment support, %G 0 50 The unit price of a micro-CHP plant, EUR H 5,000 8,000 Micro-CHP service costs, EUR a-1 0 160I Micro-CHP maintenance costs, EUR a-1 J 200 500 Technological parameters Micro-CHP total efficiency, % K

    Life span error, a L 75 -5

    85 5

    Material use Material use, error-% M Abiotic material input factor, error-% N Biotic material input factor, error-% N Material input factor of water, error-% N Material input factor of air, error-% N

    -5 -20 0

    -30 -15

    +5 +20

    0 +30 +15

    Emissions Global Warming Potential, error-% O Acidification Potential, error-% O

    -10 -10

    +10 +10

    A an estimate on the basis of Tuomaala [12], Fuehrlein et al. [13] B an estimate based on market interest rates and the works of e.g. Manczyk [16], Collins et al.

    [17] C the maximum difference between the average price and the price given by a selected company D estimated on the basis of data provided by the Finnish Energy Market Authority E an estimate based on the uncertainty related to other energy prices F expressed as the ratio of the buyback price and retail price of electricity G an estimated percentage of the capital costs of a micro-CHP plant. H estimated on the basis of price list provided by www.fuelcellstore.com I the estimate of Finnish Energy Agency for the annual service cost of a heat conversion

    system in a Finnish single-family house. J If a micro-CHP plant is substituted by a new one 1-2 times during the time period of 30 years,

    and the capital cost of a micro-CHP plant is 5000 - 8000 EUR kWhe-1, the annual maintenance costs vary between 200-500 EUR a-1. The interest rate, however, is not accounted for in this estimate.

    K an estimate based on Ellis [18] and Onovwiona et al. [19] L an estimate based on the interview of a Finnish life-cycle specialist M an estimate based on the composition given by a Finnish trader of energy equipment and

    reference estimate presented by the Technical Research Centre of Finland (VTT) N an estimate based on three sources (Vihermaa et al. [20], Sinivuori et al.[21], and Wuppertal

    Institute) O an estimate based on [15], the boiler efficiency is assumed to vary between 85 % and 95 %

    http://www.fuelcellstore.com/

  • 25

    Table 2. Source data for the comparative analysis.

    System

    Life-cycle Costs (EUR) (30 yr)

    The use of abiotic resources (kg m-2 a-1)

    The use of water (ton m-2 a-1)

    Global Warming Potential (kg CO2 m-2 a-1)

    Acidification Potential (kg SO2 m-2 a-1)

    1 47,550 81 7.54 33 0.11 2 56,700 49 15.83 22 0.07 3 36,500 64 22.59 30 0.10 4 35,550 61 22.00 29 0.10 5 38,250 59 20.79 28 0.09 6 41,200 42 14.39 19 0.06 7 60,850 45 9.14 40 0.07 8 65,900 40 7.65 35 0.06 9 55,600 43 9.05 37 0.10 10 65,250 25 0.05 29 0.07

  • 26

    Table 3. Scores and weights of a micro-CHP heating system in the example.

    Attribute a -> si wi

    Life-cycle Costs (30 a), EUR 65,250 -> 0.02 0.330 The use of abiotic resources, kg m-2 a-1 25 -> 1.00 0.167 The use of water, t m-2 a-1 0.05 -> 1.00 0.167 Global Warming Potential, kg m-2 a-1 29 -> 0.52 0.167 Acidification Potential, kg m-2 a-1 0.07 -> 0.71 0.167

  • 27

    Table 4. Intervals for life-cycle costs and environmental burdens.

    System

    Life-cycle costs (30 a) (EUR)

    Abiotic (kg m-2 a-1)

    Water (ton m-2 a-1)

    Global warming (kg CO2 -m-2 a-1)

    Acidification (kg SO2 -m-2 a-1)

    S1 37,300...57,800 73...89 7…8 27…40 0.088…0.131 S2 46,000…67,400 45...54 14…17 17…26 0.058…0.086 S3 24,900…48,100 58...70 20…25 25…37 0.081…0.121 S4 23,300...47,800 55...67 20…24 24…36 0.078…0.117 S5 26,600…49,900 53...65 19…23 23…34 0.074…0.111 S6 32,300…50,100 38…47 13…16 16…24 0.051…0.077 S7 45,800…75,900 41…49 8…10 32…48 0.057…0.082 S8 52,300…79,500 36…44 7…8 28…42 0.050…0.071 S9 43,400…67,800 39…47 8…10 30…44 0.084…0.125 S10(CHP) 44,600…85,900 23…27 0…0 23…35 0.060…0.091 Lowest 23,300 23 0 16 0.050 Highest 85,900 89 25 48 0.131

  • 28

    Table 5. Normalized score intervals for life-cycle costs and environmental burdens.

    System

    Life-cycle costs (30 a) Abiotic Water Global warming Acidification

    S1 0.45…0.78 0.00…0.24 0.67…0.73 0.26…0.66 0.00…0.53 S2 0.30…0.64 0.52…0.67 0.30…0.43 0.68…0.95 0.55…0.90 S3 0.60…0.97 0.29…0.48 0.00…0.18 0.36…0.73 0.12…0.61 S4 0.61…1.00 0.33…0.52 0.03…0.20 0.39…0.75 0.18…0.65 S5 0.58…0.95 0.36…0.54 0.08…0.25 0.44…0.79 0.25…0.70 S6 0.57…0.86 0.63…0.77 0.36…0.48 0.76…1.00 0.67…0.98 S7 0.16…0.64 0.60…0.73 0.60…0.67 0.00…0.49 0.60…0.90 S8 0.10…0.54 0.68…0.80 0.66…0.72 0.19…0.61 0.74…1.00 S9 0.29…0.68 0.64…0.76 0.60…0.67 0.12…0.57 0.08…0.58 S10 (CHP) 0.00…0.66 0.93…1.00 1.00…1.00 0.41…0.77 0.50…0.87

    1 Introduction2 The sources of uncertainty2.1 Energy use2.2 Techno-economic parameters2.3 Use of materials2.4 Emissions2.5 Conclusions of the uncertainty

    3 Methodology3.1 General frame3.2 The overall value of a heating system3.3 Application of PAIRS

    4 Comparative analysis of heating systems4.1 Alternatives4.2 Life-cycle costs4.3 Environmental burdens4.4 PAIRS model4.5 Results

    5 Summary and conclusionsAcknowledgementsReferencesAttribute